Labour pledges to end borrowing in bid to win credibility with voters

Labour will end borrowing billions to pay for the day-to-day cost of running Britain if returned to power in 2015, a leading party figure is to pledge today in a bid to win credibility with voters.

Shadow chancellor Ed Balls will offer a “binding” commitment that the next Labour government will “balance the books, deliver a surplus on the current budget and get the national debt falling in the next parliament”.

“We won’t be able to reverse all the spending cuts and tax rises that the Tories have pushed through. We will have to govern with less money, which means the next Labour government will have to make cuts too,” he is due to tell the Fabian Society in London.

Up to now, Labour has struggled to be seen as economically credible by voters. Faced with economic growth, lower inflation and rapidly-falling jobless numbers, it has had to offer more strongly-worded pledges.

Reflecting the Conservatives' growing optimism, prime minister David Cameron and others claimed yesterday that the value of real wages had begun to rise in the past year, for the first time in six years.

Accusing the Conservatives of using "highly misleading and selective statistics", Mr Balls said: "In the last 24 hours David Cameron has gone from not wanting to talk about the cost-of-living crisis to effectively telling people they've never had it so good."

Meanwhile, Labour and Liberal Democrats in the House of Lords united yesterday to make changes to Conservative- backed legislation pledging a 2017 referendum on EU membership.

In a bid to impede its passage, 80 amendments were lodged, with some demanding that the referendum question be asked in Cornish or a Scots Gaelic dialect. The Lords will debate it again next week. However, the changes already made mean it is unlikely to become law in time for the2015 election.

Labour did not oppose the legislation in the Commons, but the Lords obstruction is proof positive, Conservatives said last night, that Labour does not want a referendum. Equally, it does not want voters to know that, they said.